Northern Ireland’s First Minister Michelle O’Neill has ruled out a 15 per cent rise in the regional rate.
Rates are a property tax paid by households and businesses in the North towards public services. It is split into two parts – a district rate, which is set by local councils, and covers services such as refuse collection and street cleaning, and a regional rate, which is Northern Ireland-wide and contributes towards facilities such as hospitals, schools and roads.
An increase to the rate had been mooted by the UK government as a condition of the £3.3 billion financial package released to the restored Stormont Executive on Tuesday. It includes the stipulation that Stormont publish and implement a plan to deliver “sustainable finances”, including balancing the budget for 2024-25 by raising a minimum of £113 million in Northern Ireland – equivalent to a 15 per cent regional rate rise.
Negotiations are under way between Belfast and London over the terms of the package, as well as a new funding model for Northern Ireland.
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Ms O’Neill told reporters in Belfast on Wednesday that she was “ruling out” a 15 per cent increase. She has also said water charges will not be introduced.
We need proper funding if we are going to be able to turn that around and deliver good public services and tackle things like childcare
— Michelle O'Neill
Taking questions from the media during the visit to the Shankill Women’s Centre in Belfast with Deputy First Minister Emma Little-Pengelly, Ms O’Neill said Northern Ireland “isn’t funded properly”.
“We need proper funding if we are going to be able to turn that around and deliver good public services and tackle things like childcare,” she said.
“We are in the middle of that discussion...There was an offer put on the table before Christmas, there was some conditionality presented in that paper. We haven’t signed up to that.
“What we are in the middle of is an ongoing discussion,” she said, adding that she hoped “to be at the Treasury’s door” in the coming days. “All we are trying to do is achieve a proper funding model that allows us to do good public services.”
Ms Little-Pengelly said there would be “difficult decisions to be made in the future and we are absolutely up for that reform, what is needed to be done in terms of the significant improvement required in our public services”.
In Northern Ireland we are being asked to increase the tax burden on these hard-working families
— Emma Little-Pengelly
But she said the “reality” was that there are huge numbers of families in Northern Ireland in the “squeezed middle category” and struggling with “unaffordable childcare pressures, inflation pressures”.
She said, “What is the narrative across the rest of the UK? It is all about trying to protect household incomes, they are even talking about tax reductions, and yet in Northern Ireland we are being asked to increase the tax burden on these hard-working families.
“That is something that we are absolutely joined on in terms of making those representations to the UK government and to the Secretary of State that this is absolutely not the right time to be doing that.”
In a letter to the UK Treasury on Tuesday following the release of the £3.3 billion funding package, Minister for Finance Caoimhe Archibald said the current package was not a sustainable solution to the issue of public sector pay.
She said it was “not acceptable” to make the write-off of Stormont’s £559 million debt conditional on the publication and implementation of a sustainability plan as “it is our strong view that these debts exist primarily due to the underfunding of public services”.
The UK government said it was a “significant, fair and generous spending settlement” which would allow the Executive to “stabilise public services, better manage public finances, increase opportunities for improved infrastructure and investment, pave the way for transformation of public services, and enable the delivery of a 2023-24 pay award to public sector workers.” Additional reporting – PA
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